U.S. Health Care System is A Blood Sucking Leech

I changed to the title because this is cross-posted at RebelCapitalist. Our health care system is killing us financially. We spend more on health care then any other country and have very little to show for it. It is causing inefficiencies in the job market. The system itself is incredibly inefficient. So, why, with all these problems, can't we reform our health care system? Simple, because there is big big money in the health care industry. Just check out this Fortune 500 List of Top Industries. This big money translates to big influence in Washington. Take a look at how much money they are throwing around Washington: Link. Over $167 million in the 2008 election cycle alone - the health care industry certainly expects some return on their money, mainly in the form of killing or incredibly weakening any health care reform proposals.

In 2006 we spent $2.1 trillion on health care. That is $7,026 per capita. Health care spending is expected to continue to grow more in the future (surprise, surprise). The most frustrating thing is that we are spending the most money per capita and as a percentage of GDP than any other industrialized nation and what do we have to show for this spending:

1) We have nearly 46 million people (and probably climbing with unemployment) uninsured.

2) According to a performance study performed by the Commonwealth Fund, among 19 industrialized countries, the U.S. ranked 15th on "mortality from conditions amenable to health care," or deaths before age 75 that are potentially preventable with timely, effective care.

3) The infant mortality rate in the U.S. is 7.0 deaths per 1,000 live births, compared with 2.7 in the top three countries.

4) Barely half of U.S. adults receive all recommended clinical screening tests and preventive care, according to national guidelines.

5) A 2005 study by researchers at Harvard University found that that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses.

[For more on the level of health care quality check out this compilation of facts: Link]

Besides being incredibly costly, our health care system is creating inefficiencies in the job market and killing innovation. People are reluctant to change jobs because of the fear of either losing health care coverage or having to pay more in health insurance. The health care system is killing entrepreneurship and innovation.

Daunted by health-care costs, a would-be technology entrepreneur in Texas decides not to start her own business. A communications expert in Washington decides not to strike out on his own. And a freelance magazine editor in Brooklyn decides to take a less satisfying corporate job.

Don't forget those people who want to retire early but can't because they can't afford private health insurance and they are not old enough for medicare (wait to age 65).

Economists call this phenomenon "job lock," and studies suggest that it keeps between 20 percent and 50 percent of workers from leaving their current jobs.

What proposals are floating around Washington? Well, we have the following, but unfortunately for us one of them has been ruled out by our elected officials (who receive contributions for health care lobbyists):

1) Public insurance plan option. This would be a government-run public insurance system. It would be similar to medicare and would provide an option to people who are currently uninsured or underinsured. The theory is that it would compete with private health insurance companies. But the "devil is in the details". The effectiveness of the public insurance plan option for us depends on how it is structured and that is the big issue in Washington. Ezra Klein does a great job of breaking down the structuring options.

2) Single Payer Health Care/Medicare for All. This is far from "socialized medicine".

Single-payer national health insurance is a system in which a single public or quasi-public agency organizes health financing, but delivery of care remains largely private.

Here are some of the key features of a Single Payer System (as proposed by Physicians for a National Health Plan):

  • Universal, Comprehensive Coverage.
    Only such coverage ensures access, avoids a two-class system, and minimizes expense
  • No out-of-pocket payments.
    Co-payments and deductibles are barriers to access, administratively unwieldy, and unnecessary for cost containment
  • A single insurance plan in each region, administered by a public or quasi-public agency
    A fragmentary payment system that entrusts private firms with administration ensures the waste of billions of dollars on useless paper pushing and profits. Private insurance duplicating public coverage fosters two-class care and drives up costs; such duplication should be prohibited
  • Global operating budgets for hospitals, nursing homes, allowed group and staff model HMOs and other providers with separate allocation of capital funds.
    Billing on a per-patient basis creates unnecessary administrative complexity and expense. A budget separate from operating expenses will be allowed for capital improvements
  • Free Choice of Providers.
    Patients should be free to seek care from any licensed health care provider, without financial incentives or penalties
  • Public Accountability, Not Corporate Dictates.
    The public has an absolute right to democratically set overall health policies and priorities, but medical decisions must be made by patients and providers rather than dictated from afar. Market mechanisms principally empower employers and insurance bureaucrats pursuing narrow financial interests
  • Ban on For-Profit Health Care Providers.
    Profit seeking inevitably distorts care and diverts resources from patients to investors
  • Protection of the rights of health care and insurance workers. A single-payer national health program would eliminate the jobs of hundreds of thousands of people who currently perform billing, advertising, eligibility determination, and other superfluous tasks.These workers must be guaranteed retraining and placement in meaningful jobs.

This is just one proposal for Single Payer system. There are plenty more out there but unfortunately for us this option has been essentially killed. The battle that is left is how much will health care insurance industry lose: a lot or little. If there is any correlation between money and influence in Washington, it looks like we will lose the battle.

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Goverment budget priorities should be:

1) Maximizing our return on TARP and other taxpayer giveaways to financial conglomerates;

2) Health care reform

3) Environment/Climate change

4) Education

That is it. No more war funding; very little defense spending; serious farm subsidy reform. But with all the special interest money in Washington this probably won't happen.

RebelCapitalist.com - Financial Information for the Rest of Us.

it sure is

Submitted by on

I read yesterday a New York Times article trying to claim that single payer universal health or especially putting controls on private insurance will "run into trouble" as a monopoly and other business law violations.

What a laugh and to me an obvious health care lobbyist industry story plant.

We have right now the financial sector, acting like a government endorsed cartel and I'm not even mentioning the mega mergers and corporations like Intel and Microsoft.

Oh yeah, sure national law for universal health care will be challenged as a monopoly.

A hidden health tax?

Insured in U.S. Paid 'Hidden Health Tax'

RebelCapitalist.com - Financial Information for the Rest of Us.

article doesn't spit out the specifics on the "tax"

Submitted by on

so what I think they are talking about is benefits are not taxed but when they force workers to pay out of pocket, that income which is now going to benefits is now taxed.

Very confusing article in this day and age of quick information scan!

I am sorry I should have included some quotes

The hidden tax is in the form of cost-shifting.

On average, the uninsured paid more than 37 percent of their health-care costs themselves, the report said. Government programs and charities paid for 26 percent of care, the report said.

Milliman estimated about $42.7 billion in health-care costs were unpaid in 2008. Those costs were shifted to insurers in the form of higher charges for health services, Families USA said. The charges were passed on to families and businesses as higher premiums, the group said.

“We do cost-shift wherever we can,” said Larry S. Gage, president of the National Association of Public Hospitals, at the news conference. Gage said his group of 100 hospitals, including those under New York City Health and Hospitals Corp., handle 20 percent of all the uncompensated care in the U.S.

RebelCapitalist.com - Financial Information for the Rest of Us.

isn't that specific (not)

Submitted by on

So, increased costs are a tax? Is this like some press release trying to get the tax crowd (stop taxing us) to pay attention by framing it in such fashion?

Medical bills and U.S. bankruptcy

Medical bills underlie 60 percent of U.S. bankruptcies: study

"For middle-class Americans, health insurance offers little protection"

This must be a budgetary and legislative priority.

RebelCapitalist.com - Financial Information for the Rest of Us.

And Medicare doesn't cause problems

Submitted by on

Thank God we have someone that is finally going to investigage Medicare fraud.

"WASHINGTON -- The Obama administration Wednesday announced a mission to combat chronic Medicare scams operating from Miami to Los Angeles that are costing taxpayers billions of dollars a year." Investigating fraud is included in the administration figures of private companies. Do you think that the increased Medicare scrutiny that Obama proposes will be added in the much touted low Medicare administration figure. If they don't count the labor of CMS in the admin figure they sure won't count the increased fraud investigations.

I wonder, will the investigations be included in the Medicare administration figures. Probably not.  If they don't include labor costs of CMS in the admin figures, why include fraud investigations.  Wish I could run my business like the government.  I could call my income expenses.

I kind of think the UK - should do this, it will save money.

From the UK Daily Mail

Sorry, why should the NHS treat people for being fat?

 

Could you ever have imagined an age in which young mothers dying of breast cancer would literally have to fight to the death to be given the drug Herceptin, while obese women have access to stomach-stapling operations, anti-obesity pills, gastric bypasses and any other weight-loss 'cure' that takes their fancy, all on the NHS?

Yes, the same NHS that denied about half a million Alzheimer's sufferers the £2.50-a-day drug Aricept to delay the onset of dementia, yet spends millions to treat the symptoms of those whose only "illness" is overeating.

As figures published yesterday revealed, the number of patients being treated for being grossly overweight has gone up sevenfold in the past decade; in the past year alone, the number has increased by 30 per cent.

The fact is, the current politically correct non-judgmental policy is not only failing to solve Britain's obesity crisis, it is actually fueling it. What's needed instead is some tough love.

In principle, I'm against any form of NHS rationing. The great joy of the health service is that it is free at the point of use, regardless of the medical condition that necessitates it. But obesity isn't an illness. It's a self-induced condition.

Why, then, should the NHS pay for gastric bands, stomach-stapling, or expensive medication, simply because the 'victims' can't be bothered to lose weight the correct way?

I'll wager that if the NHS stopped offering these treatments, it would shock a huge number of the overweight into taking responsibility for their own condition, instead of seeking a miracle cure at our expense.

But the crucial difference is that you cannot cure cancer by stopping smoking, nor replace a liver by becoming teetotal. The vast majority of the chronically overweight, by contrast, could 'cure' themselves simply by following a healthier lifestyle.

Quite simply, with a cash-strapped NHS that can't even afford to treat the dying, we must stop indulging the self-indulgent.

I also think we should have a law like the Matching Act in the Netherlands. It would save the $$$$$ billions. The Dutch system is currently being held as a beacon of national planning.

Brigit Toebes joined the law school as a lecturer in 2005. She was previously employed as a legislative advisor at the Netherlands Council of State, an advisory body to the Dutch government. Among other things, she was involved in advising on the reorganisation of the Dutch health care sector and on the restructuring of the supervisory mechanisms in the financial sector.

"Due to the so-called ‘Matching Act’, only people with legal status are covered by the sickness fund. This means that illegal aliens are excluded from access to the health care package provided under the fund. In order to prevent inhumane situations from arising, the Matching Act provides that people without legal status may claim subsidised medical help in cases of ‘medical necessity’. This means that they have access to a limited health care package. What should be provided under this package has been heavily debated in the Netherlands. As part of the discussion, before the term ‘ medical necessity’ was introduced, the term ‘ emergency medical care’ was applied, which is stricter than ‘ medical necessity’. 

A practical implication of the system is that, in practice, people without legal status do not have access to treatment for HIV/AIDS."

The rest of the world does have unique ways to cut costs.

Oh and one more thing.  The health care industry is more than one group.  It is the HVAC people that charge hospitals double the amount, the inside painters that use special paints (such as low VOC), the printers, the secretaries, the list is long.   The biggest and remaining large employer in my town is one of our two hospitals.  It is the remaining place that pays a good wage.  My neighbor lost his carpenter job in the down turn but found a job at the hospital.  Their benefits are good, their pay is good.

So when we do cut back on the cost, that cut is going to ripple through a big, big pond.  Imagine that ripple happening in their current deep, deep recession.

It will be interesting.

I guess I can be glad I am not on Medicare.  My personal physician has dropped out and isn't taking new Medicare patients.  I pay my doc $78 for a visit.  He gets $49 from Medicare and says it doesn't pay to see them.  I guess if Medicare paid him a bit more I might be  be paying less than $78.

I also fire clients that take too much time but I am not in the medical field.

Dr. Gottlieb, a former official at the Centers for Medicare and Medicaid Services

Government insurance programs also shift compliance costs directly onto doctors by encumbering them with rules requiring expensive staffing and documentation. It's a way for government health programs like Medicare to control charges. The rules are backed up with threats of arbitrary probes targeting documentation infractions. There will also be disproportionate fines, giving doctors and hospitals reason to overspend on their back offices to avoid reprisals.